What are Special provisions in respect of certain
undertakings or enterprises in certain special category
States? Section
80-IC of
Income Tax Act 1961

Special provisions in respect of certain undertakings or
enterprises in certain special category States is defined
under section 80-IC of Income Tax Act 1961.
Provision under this Section is:

Section 80-IC of Income Tax Act "Special
provisions in respect of certain undertakings or enterprises
in certain special category States"

Section 80-IC. (1) Where the gross total income of an
assessee includes any profits and gains derived by an
undertaking or an enterprise from any business referred to
in sub-section (2), there shall, in accordance with and
subject to the provisions of this section, be allowed, in
computing the total income of the assessee, a deduction from
such profits and gains, as specified in sub-section (3).
96(2) This section applies to any undertaking or
enterprise,-

(a) which has begun or begins to manufacture or produce
any article or thing, not being any article or thing
specified in the Thirteenth Schedule, or which manufactures
or produces any article or thing, not being any article or
thing specified in the Thirteenth Schedule and undertakes
substantial expansion during the period beginning-

(i) on the 23rd day of December, 2002 and ending before
the 1st day of April, 2007, in any Export Processing Zone or
Integrated Infrastructure Development Centre or Industrial
Growth Centre or Industrial Estate or Industrial Park or
Software Technology Park or Industrial Area or Theme Park,
as notified by the Board in accordance with the scheme
framed and notified97 by the Central Government in this
regard, in the State of Sikkim; or

(ii) on the 7th day of January, 2003 and ending before
the 1st day of April, 2012, in any Export Processing Zone or
Integrated Infrastructure Development Centre or Industrial
Growth Centre or Industrial Estate or Industrial Park or
Software Technology Park or Industrial Area or Theme Park,
as notified by the Board in accordance with the scheme
framed and notified96 by the Central Government in this
regard, in the State of Himachal Pradesh or the State of
Uttaranchal; or

(iii) on the 24th day of December, 1997 and ending before
the 1st day of April, 2007, in any Export Processing Zone or
Integrated Infrastructure Development Centre or Industrial
Growth Centre or Industrial Estate or Industrial Park or
Software Technology Park or Industrial Area or Theme Park,
as notified97 by the Board in accordance with the scheme
framed and notified by the Central Government in this
regard, in any of the North-Eastern States;

(b) which has
begun or begins to manufacture or produce any article or
thing, specified in the Fourteenth Schedule or commences any
operation specified in that Schedule, or which manufactures
or produces any article or thing, specified in the
Fourteenth Schedule or commences any operation specified in
that Schedule and undertakes substantial expansion during
the period beginning-

(i) on the 23rd day of December,
2002 and ending before the 1st day of April, 2007, in the
State of Sikkim; or
(ii) on the 7th day of January, 2003 and ending before the
1st day of April, 2012, in the State of Himachal Pradesh or
the State of Uttaranchal; or
(iii) on the 24th day of December, 1997 and ending before
the 1st day of April, 2007, in any of the North-Eastern
States.
(3) The deduction referred to in sub-section (1) shall be-
(i) in the case of any undertaking or enterprise referred to
in sub-clauses (i) and (iii) of clause (a) or sub-clauses (i)
and (iii) of clause (b), of sub-section (2), one hundred per
cent of such profits and gains for ten assessment years
commencing with the initial assessment year;
(ii) in the case of any undertaking or enterprise referred
to in sub-clause (ii) of clause (a) or sub-clause (ii) of
clause (b), of sub-section (2), one hundred per cent of such
profits and gains for five assessment years commencing with
the initial assessment year and thereafter, twenty-five per
cent (or thirty per cent where the assessee is a company) of
the profits and gains.
(4) This section applies to any undertaking or enterprise
which fulfils all the following conditions, namely:-
(i) it is not formed by splitting up, or the reconstruction,
of a business already in existence:
Provided that this condition shall not apply in respect of
an undertaking which is formed as a result of the
re-establishment, reconstruction or revival by the assessee
of the business of any such undertaking as is referred to in
section 33B, in the circumstances and within the period
specified in that section;
(ii) it is not formed by the transfer to a new business of
machinery or plant previously used for any purpose.
Explanation.-The provisions of Explanations 1 and 2 to
sub-section (3) of section 80-IA shall apply for the
purposes of clause (ii) of this sub-section as they apply
for the purposes of clause (ii) of that sub-section.
(5) Notwithstanding anything contained in any other
provision of this Act, in computing the total income of the
assessee, no deduction shall be allowed under any other
section contained in Chapter VIA or in section 10A or
section 10B, in relation to the profits and gains of the
undertaking or enterprise.
(6) Notwithstanding anything contained in this Act, no
deduction shall be allowed to any undertaking or enterprise
under this section, where the total period of deduction
inclusive of the period of deduction under this section, or
under the second proviso to sub-section (4) of section 80-IB
or under section 10C, as the case may be, exceeds ten
assessment years.
(7) The provisions contained in sub-section (5) and
sub-sections (7) to (12) of section 80-IA shall, so far as
may be, apply to the eligible undertaking or enterprise
under this section98.
(8) For the purposes of this section,-
(i) "Industrial Area" means such areas, which the Board,
may, by notification in the Official Gazette, specify in
accordance with the scheme framed and notified by the
Central Government;
(ii) "Industrial Estate" means such estates, which the
Board, may, by notification in the Official Gazette, specify
in accordance with the scheme framed and notified by the
Central Government;
(iii) "Industrial Growth Centre" means such centres, which
the Board, may, by notification in the Official Gazette,
specify in accordance with the scheme framed and notified by
the Central Government;
(iv) "Industrial Park" means such parks, which the Board,
may, by notification in the Official Gazette, specify in
accordance with the scheme framed and notified by the
Central Government;
(v) "Initial assessment year" means the assessment year
relevant to the previous year in which the undertaking or
the enterprise begins to manufacture or produce articles or
things, or commences operation or completes substantial
expansion;
(vi) "Integrated Infrastructure Development Centre" means
such centres, which the Board, may, by notification in the
Official Gazette, specify in accordance with the scheme
framed and notified by the Central Government;
(vii) "North-Eastern States" means the States of Arunachal
Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and
Tripura;
(viii) "Software Technology Park" means any park set up in
accordance with the Software Technology Park Scheme notified
by the Government of India in the Ministry of Commerce and
Industry;
(ix) "Substantial expansion" means increase in the
investment in the plant and machinery by at least fifty per
cent of the book value of plant and machinery (before taking
depreciation in any year), as on the first day of the
previous year in which the substantial expansion is
undertaken;
(x) "Theme Park" means such parks, which the Board, may, by
notification in the Official Gazette, specify in accordance
with the scheme framed and notified by the Central
Government.